Why do users find neo bank apps highly convenient and cost-efficient? What makes these apps grab a consistent rate of market share year after year? A significant development in fintech funding has led to many startups diving into digital financing services in innovative ways. One of them is neo banking. They mostly approach a fintech app development company to build a neobank app that can facilitate users to perform financial transactions quickly and accurately.
Neobanks are very different from traditional banks in many ways. The significant differences are in costs and customer engagement practices. Developing iOS and Android apps for several financial startups, we know what are the top technologies that are needed to offer digital-only banking services.
The blog will help you understand the basic concept of a Neo Bank app and the stages of its development.
What is the Neobank App? (with examples)
Neobank is a digital bank offering various banking services, such as cross-border money transfer, debit and credit card issuance, P2P payment, and account management. These apps work without a bank’s physical presence. They are different from traditional banking apps due to their premium IT infrastructure. These banking apps offer all banking services through mobile apps or desktops. A full-stack neobank app is a standalone bank with a banking license that allows it to operate independently. On the other hand, a front-end-focused neobank does not have its own banking license. It connects with BaaS, and the bank partner will support a neobank in terms of license, audit, and much more.
Neobank apps are gaining tremendous popularity in countries like the USA. However, Statista estimates that the total number of neo-banking users will rise to 80.78 mn by 2028. In 2024, the average transaction value per user amounted to US $28.8k in the neobanking market.
How Does the Neobanking App Work?
For every fintech entrepreneur, it is crucial to understand the core functionality of a neo bank app first. Neo bank apps can provide almost all sorts of online banking services, are purely digital-driven, and offer ultra-modern banking facilities. For example, in the USA, there are fast-running neo banking apps like Chime, Revolut, and Acorns.
Chime has more than 13 million account holders. It is a digital-only fintech company with banking partners that offer checking and savings accounts. Chime provides all banking services without charging any fees, including monthly or overdraft fees. It offers early direct deposit, an automatic savings tool, and a Visa debit card. One of Chime’s best features is rounding up purchases to the nearest dollar. It provides a user-friendly interface and focuses on offering accessible banking services to various customers.
How Neobanks Make Money?
Neobank apps can earn profits by practicing the five business models below.
Interchange Model
It sources revenue through interchange every time customers pay with Neobank’s card.
Credit card Model
With this model, you can offer a credit card or similar such offering and then provide a bank account.
Ecosystem Model
Through checking account systems, it provides other types of monetization strategies like monthly subscriptions, etc.
Asset Model
With this model, you can offer savings accounts and get deposits at competitive rates. They also provide services like moral money spending management.
Product Extensions Model
This model can become distinctively successful when driven by prominent tech companies and partnerships with popular banks.
How To Create A Neobanking App?
To create a robust Neo banking app for your target audience, you can always approach a company providing high-quality mobile app development services. Here is a step-by-step guide for Neo banking app development.
Identify The Requirements
Knowing what kind of neo-banking app you need to develop for your target audience is very important. In addition, underlining various other requirements, such as features and functionalities, regulatory compliance, and target user base, is also vital. You must also check competitors’ neobnaking apps and learn about their functionality, unique selling proposition, weaknesses, etc.
Find a Fintech App Development Company
The next important step is to choose a reliable fintech app development company. The company must have in-depth knowledge of the recent trends in the fintech world. Accordingly, you can hire dedicated developers who are experts and have hands-on experience harnessing the latest technologies. As a technical partner, they will help you build a robust neo-bank app that will fulfill the requirements of users and your company.
Create a Wireframe
After finding the right fintech app development partner, you must create a basic wireframe and rough outline for the new banking app and hire trustworthy UI/UX design services to create an intuitive user interface. Generally, there are dedicated UI/UX developers associated with your chosen fintech app development company. They will help you design innovative interfaces that match your brand and user persona. Creating a wireframe can save time and help you create a neobanking app systematically.
Build an MVP
After the wireframes are prepared, you must proceed to build an MVP (Minimum Viable Product) of the neo-banking app. Making an MVP will help you, as an entrepreneur, make necessary iterations simultaneously with the ongoing production process. Hence, your app will be developed faster, and you will obtain rapid feedback. Building the front and back end of your app and integrating it with third-party APIs will help you execute various other functionalities like P2P payments, push notifications, evaluating credit scores, etc.
Develop Neobanking App
Once your MVP gets approved, it is time to build the product. You must now integrate advanced features and functionalities that align with your business requirements and the latest market trends. You must choose the best technology stack, including front-end and back-end development, database, APIs, authentication, cloud infrastructure, security, and deployment tools. For example, integrating an AI-powered credit score analyzer is nowadays essential, as it helps users check their financial history and assists users in answering their queries around the clock.
Security Compliance
The more sophisticated services you provide in Neobank apps, the more chances of cyber-attacks. Therefore, you must find ways to cover the vulnerability of your app and save it from cyber-attacks and data breaches. Implementing the best security compliances and measures is very important. It protects your financial data and keeps it completely private. Therefore, you must implement various standards such as GDPR, PCI DSS (The Payment Card Industry Data Security Standard), and PSD2 (Payment Services Directive Two). In addition, you must also integrate high-security measures such as two-factor authentication, end-to-end encryption, one-time passwords, etc.
Testing and Quality Assurance
Testing your Neo Banking app is the most important step, as it will check all its functionalities at different levels and help you improve it. Soon after testing, you can use the app on different platforms and multiple devices to ensure your users get quality services. In addition, releasing a beta version to test and then gathering feedback for the Neo Banking application is advisable.
Deployment
The last stage that comes after app testing is deploying your neobnaking app into the app stores. In addition, you must closely monitor the app’s performance and set different KPIs to check its performance levels. Accordingly, you must make all necessary changes within a concise timeframe. You must ensure your neo-banking app has the most advanced features and functionalities to stay ahead of competitors.
The Top Features of Neobanking Apps
Some of the topmost features of neo banking apps are as follows:
Account Opening
It provides an instant account opening feature where users can easily open their neobanking accounts with minimum details.
Multiple Payment Options
It offers a wide range of payment options, such as paying and receiving money through net banking, credit/debit cards, digital wallets, and cryptocurrencies.
Card Management
It allows users to manage their debit and credit cards in one place. The card management feature allows users to modify the limits, change PINs, and make payments through credit card bills.
Online Lending
This feature allows users to lend P2P loans at a mutually decided interest rate. Users can get instant loans and lend loans to others.
Expense Tracker and Budget Tool
Tracks the daily average spending of users and helps them prepare budgets to save money and avoid unnecessary purchases.
Real-Time Fraud Detection
Provides a real-time fraud detection feature to analyze credit scores and identify loan defaulters. With the fraud detection features, you can analyze the credit scores of users who seek loans, and accordingly, it notifies lenders about their past financial history. All this is made possible through AI and ML algorithms.
Gamification
The feature enhances user experience and rewards users with badges and points when they finish a specific level. This feature motivates users to stick with the new banking services.
Push Notifications
This feature provides real-time updates about account balances, security alerts, and transactions. It helps users remain informed about new offers, discounts, bill payment dates, and interest rates.
Generative AI-Powered Chatbot
With a generative AI-powered chatbot, you can address users’ queries and provide personalized responses 24/7. With AI/ML-powered technologies, these chatbots can interpret user query context and deliver custom real-time responses.
Conclusion
The popularity of neobanking apps is consistently gaining higher momentum. Hence, this is the best time to develop a robust neobank app for your users and to earn maximum profits in the future. All you need is to partner with a reliable fintech app development company to get your desired app. Whitelotus Corporation is the leading e-wallet app development company in India and abroad. We have our presence in the USA, UK, Europe, and UAE. We help our clients get the best fintech apps that align with their needs. Our future-forward approach and strategic development processes have always delivered successful FinTech mobile apps with high-end features and functionalities. For more details, contact our experts or visit us on our website.
